SSN Financial Innovation Program.pdf

This is a Source Sought Notice issued by the U.S. Agency for International Development, USAID/Georgia Mission. The purpose of this notice is to gauge interest from small business organizations to assist USAID to promote Georgia’s private enterprise access to more diversified investment resources to grow, create jobs and create the necessary base to support Georgia’s journey to self-reliance.

This notice is not a Request for Proposals and in no way commits USAID to award a contract. USAID does not intend to award a contract based solely on submissions in response to this Sources Sought Notice, nor does it intend to pay for any costs incurred in response to this Notice.

The anticipated total amount of the Program is $19,000,000. The purpose of the USAID Financial Innovation Program (FIP) is to support the deepening of the financial market outside of the banking sector and to link Georgian businesses to diversified investment capital. This will be accomplished by

a. strengthening the financial market regulatory environment and intermediary institutions and leveraging innovations in financial technology; b. stimulating the market for equity/quasi-equity instruments and tailored financial products and services for Georgian businesses; c. supporting Georgian businesses to access the fit-for-purpose financing. The expected outcome of FIP is the establishment of a dynamic and vibrant financial market that meets the needs of the private sector and complements the debt financing of the banking sector.

Through FIP USAID/Georgia seeks to achieve these top-level objectives:

1. (Contractual indicator) Value of local and foreign capital mobilized for Georgia’s private sector (LOP target -$300 mln) out of which:

● In equity capital (LOP target - $100 mln)

● Commercial capital (LOP target - $100 mln)

2. (Contractual indicator) Jobs created by USAID-supported businesses (LOP target - 2500)

3. (Contextual indicator) Share of net financial assets outside of the banking sector (LOP target -

20%)

USAID/Georgia seeks to determine the capabilities of small business organizations under FAR 19.2.

Interested small businesses must demonstrate the experience and ability to perform the type of work described in this notice. The capability statement must include relevant examples of both governmental and non-governmental contracts under which the firm has performed if applicable.

SERVICES AND TASKS REQUIRED

Below are the services that are envisioned under this activity.

a. Management and Administrative Services

General management and administrative support which include, but are not limited to:

1. Overall management and administration of the contract, including both expatriate and home office support and administrative services.

USAID|Georgia 29 Georgian-American Friendship Ave.

Tbilisi 0131, Georgia

2. Management of key personnel and additional long-term and short-term personnel.

3. Oversight, quality control, and general technical support

4. Managing the overall reporting needs of the program

5. Managing grants under contract

b. Technical Services

To improve access to diversified investment resources in Georgia, the contractor must engage with the private sector and key Government of Georgia institutions to strengthen institutions, regulations, and systems that support innovative, alternative financing products and services (Component 1); engage with financial intermediaries to stimulate the supply of innovative, alternative financial products/services to the private sector (Component 2); engage with local and international Business Advisory Service providers to improve the capacity of the private sector to access fit-for-purpose financing (Component 3).

Component 1: Strengthen enabling environment and financial market infrastructure to support innovative, alternative financing products and services.

Under this component, the contractor must design and pilot initiatives that strengthen the broad, systemic conditions in which the finance sector of an economy operates, including legal and regulatory framework and oversight, protection of property rights, and financial intermediary institutions that encourage investment through new and diverse financial products. Interventions under this component should be closely aligned with activities in other components of the FIP and should be targeted at removing barriers to the Program’s capital mobilization targets.

Within this Component, the contractor is also expected to carry out interventions that promote the adoption of financial technologies in financial intermediation.

Component 2: Support the development of a local financial market to deliver innovative, alternative financial products/services to the private sector.

This component aims to expand the products and services accessible to Georgian start-ups and SMEs beyond conventional bank loans. The contractor must proactively engage with a variety of stakeholders - financial institutions, GoG, Development Finance Institutions, other donors, and the private sector to unlock sustainable private capital sources for the Georgian start-ups and SMEs according to their growth profile.

Sub-component 2.1: Stimulate market for private equity and quasi-equity instruments for start-ups and SMEs.

The purpose of this sub-component is to stimulate the establishment and development of funds and facilities that provide SMEs access to customized equity and quasi-equity instruments. The Program resources invested in this component will help improve the risk-return profile of investments in the country so that they can catalyze additional private commercial capital for development objectives.

Sub-component 2.2: Diversify financial products and services tailored to SME needs

The purpose of this sub-component is to engage with a wide range of bank and non-bank financial institutions, including MFIs, leasing and insurance companies, business advisory services to introduce and/or popularize financial products and services which are tailored to start-up and SME needs.

Component 3: Improve the capacity of the private sector to access fit-for-purpose financing

The purpose of this component is to provide technical assistance and grants to promising businesses to further develop their capability to access finance. The Program through a competitive process will select a set of Georgian and international business advisory service providers which will provide transaction-based support to the Georgian businesses on a cost-share basis to access finance.

Transaction-based support could include advising on legal, financial planning, prospectus development, environmental/social/corporate governance (ESG), responsible investment, and investor protection standards, assist in acquiring local or international ratings and other tools which will result in access to needed financing for targeted investment from the public (local or foreign stock exchange) or private (equity funds, IFI, donor, banks, leasing companies, individual investors, etc) sources.

Business advisory service (BAS) providers and transaction advisors will be engaged through a pay-for-performance/pay-for-results incentive mechanism. The primary metric is evidence of disbursement of additional financing for targeted investment.

CAPABILITY STATEMENT REQUIREMENTS

Interested small business organizations must demonstrate the experience and ability to perform the kind of work described in this notice. Organizations must supply capability statements that must provide relevant examples of both governmental and non-governmental contracts under which the firm has performed. The items below must be included in the response.

1. Three-page statement describing the firm's capability to execute the tasks in items a. and b.

2. Three-page statement describing the firm’s experience in relation to the services being required.

3. One-page table ( Table A) of this notice (see below) with a list of up between three to ten past or current projects demonstrating relevant work experience in items listed under service required.

4. A statement identifying the applicable small business and socioeconomic designation in accordance with FAR 19.3. Consortiums are encouraged to respond as long as the prime contractor is a small business.

Table A.

Project Overview Country Year Point of Contact

Phone and/or email

Responses must not exceed seven (8) pages, including the past performance table. Any organization responding to this Sources Sought Notice should ensure that its response is complete and sufficiently detailed to allow the government to determine the organization's qualifications to perform this work.

Written capability statements must be received no later than July 13, 2021 – 4 pm Tbilisi Time. These submissions must be submitted by email ONLY to Yana Adelberg Acquisition and Assistance Specialist at yadelberg@usaid.gov and Robert Claussen, Contracting Officer at rcocaucasus@usaid.gov. In the subject line of the email write: Georgia Financial Innovation Program - Sources Sought Notice - Small Businesses. Fax and hand carried submissions will not be accepted. Phone inquiries will not be entertained.

Francis Hall Regional Contracting Officer USAID/Georgia